Fraudulent Transfers

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Bankruptcy Beat: Payments Made Directly From A DIP Account More Likely To Be “Unauthorized” Post-Petition Transfers

On December 19, 2014, The Honorable Julie A. Manning issued a Memorandum and Decision in the In re Louis Gherlone Excavating, Inc. case with respect to a Complaint filed by the Chapter 7 Trustee, Richard M. Coan (“the Trustee...more

Firm Wins Victory for BMO Harris at Minnesota Supreme Court

Stinson Leonard Street attorney Keith Moheban led a team of attorneys that won an important decision for firm client BMO Harris Bank at the Minnesota Supreme Court Feb. 18, 2015. Construing Minnesota’s Uniform Fraudulent...more

Blog: The Ninth Circuit Rejects the “Dominion and Control Test” for Determining the Initial Transferee in Fraudulent Conveyance...

Under section 550(a) of the Bankruptcy Code, a trustee or debtor in possession may recover property (or its value) that has been fraudulently transferred “from the initial transferee or the entity for whose benefit the...more

Oil Price Decline: Positioning for Turnaround or Sale

As a reaction to the dramatic oil price volatility, many energy companies plan to streamline operations by reducing work force and shedding assets. Those who do so face tightening credit and decline in asset value that may...more

Williams v. FDIC (In re Positive Health Management) - Lender Forced to Return Payments Made by Non-Borrower

On October 16, 2014, the United States Court of Appeals for the Fifth Circuit entered an order requiring a real estate lender, First National Bank (the “Lender”), to refund certain mortgage payments it received from...more

Good intentions: Don’t let asset transfers run afoul of the law

With the current estate tax regime of a high gift and estate tax exemption amount and low estate tax rates, transferring wealth is becoming the focus of estate planning rather than reducing estate tax liability. And with...more

Fraudulent Transfer: A Case Where Strong Arm Powers Were “An Inch Too Short”

A Chapter 11 trustee sought to avoid a transfer of property under Section 544 of the Bankruptcy Code that occurred after (1) the bankruptcy petition was filed and (2) a chapter 11 plan of reorganization was confirmed. ...more

U.S. Bank v. Indian Harbor: Another Blow to the Restitution/Disgorgement Defense

In recent years, purchasers of D&O and professional liability insurance have been stunned to learn that their carriers have denied coverage for a wide range of claims on the theory that their policies do not cover loss that...more

Southern District of New York Holds in Madoff That the Bankruptcy Code Cannot Be Used to Recover Extraterritorial Transfers

Dealing a major blow to the trustee’s efforts to recover fraudulent transfers on behalf of the bankruptcy estate of the company run by Bernard Madoff, Judge Jed S. Rakoff of the United States District Court for the Southern...more

MN Supreme Court: Creditors May Void Fraudulent Transfers of Assets in Uncontested Divorces

On July 9, 2014, in Citizens State Bank Norwood Young America v. Gordon Brown, et al., the Minnesota Supreme Court held that Minnesota's Uniform Fraudulent Transfer Act ("MUFTA") may be applied to transfers of assets made as...more

Business Litigation Report -- June 2014

In This Issue: - Main Article: ..Tronox Inc. v. Anadarko Petroleum Corp. (In re Tronox Inc.) – Bankruptcy Court Takes Unusual Steps to Declare Corporate Restructuring a Fraudulent Transfer - Noted With...more

Tronox Inc. v. Anadarko Petroleum Corp. (In re Tronox Inc.) – Bankruptcy Court Takes Unusual Steps to Declare Corporate...

Companies that have valuable assets but also face significant liabilities will sometimes engage in restructurings to isolate, or “ring-fence,” the good assets from the liabilities. Often the companies are able to accomplish...more

Eleventh Circuit Holds Custodian Bank Has No Duty To Police Securities Transactions By Customer’s Investment Advisor

On April 14, the U.S. Court of Appeals for the Eleventh Circuit held that a custodian bank had no duty under New York or Florida law to identify or alert a customer to fraudulent transactions directed by the customer’s...more

Attacking LBO Payouts as State Law Fraudulent Transfers

The United States Bankruptcy Court for the Southern District of New York (the “Court”) in Weisfelner v. Fund 1 (In Re Lyondell Chemical Co.), 2014 WL 118036 (Bankr. S.D.N.Y. Jan. 14, 2014) recently held that the safe harbor...more

Lyondell: Is the Safe Harbor Closed to Former Shareholders of LBOs?

In a recent decision by the United States Bankruptcy Court for the Southern District of New York, Weisfelner, v. Fund 1, et al. (In re Lyondell Chem. Co.), 2014 Bankr. LEXIS 159 (Bankr. S.D.N.Y. January 14, 2014), the Court...more

Lyondell Bankruptcy Court Holds That Safe Harbors Do Not Prohibit Creditors From Asserting State Law Constructive Fraudulent...

On January 14, 2014, Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York in Weisfelner v. Fund 1. (In re Lyondell Chemical Co.), Adv. Proc. No. 10-4609 (REG), 2014 WL 118036...more

Caveat Charities: Disgorging Donations as Fraudulent Transfers

The Bankruptcy Code permits a trustee to avoid transfers of property that a debtor has made within two years prior to its bankruptcy filing. In 1998, Congress added a safe-harbor provision for contributions to qualified...more

Are School Tuition Payments Fair Game For Bankruptcy Trustees in Parents' Personal Bankruptcy?

Parents who are forced to file for personal bankruptcy may be surprised to find that school tuition payments they made for their children years earlier could become the target of recovery by an aggressive bankruptcy trustee. ...more

Stanwich Clarifies Wagoner Rule in Fraudulent Transfer Cases

In the Second U.S. Circuit, the so-called Wagoner rule deprives a trustee of standing to sue third parties, such as lawyers and investment bankers, if the bankrupt corporation participated with them in defrauding creditors. A...more

Rogers Towers: Commencing Proceedings Supplementary to Recover Fraudulent Transfers

Proceedings supplementary are intended to be a speedy and relatively inexpensive means by which a judgment creditor can recover fraudulent transfers from third parties. Unlike conventional suits, proceedings supplementary do...more

Ninth Circuit Holds That Debt Can Be Recharacterized as Equity

The US Court of Appeals for the Ninth Circuit recently resolved a split within the circuit when it held that a bankruptcy court has the power to recharacterize debt as equity. In In re Fitness Holdings International, Inc.,...more

Liability of Directors in Canada – An Excerpt

This article is an excerpt of the Canada Chapter of International Liability of Corporate Directors, 2nd edition, published by Juris Publishing in February 2013. This excerpt excludes numerous aspects of the full chapter,...more

Bill on Bankruptcy: Rakoff Reverses Himself in Madoff Case  [Video]

Feb. 13 (Bloomberg) -- Judges rarely reverse themselves. When U.S. District Jed Rakoff recanted a ruling he made previously in the liquidation of Bernard L. Madoff Investment Securities Inc., the reversal was important...more

Stern v. Marshall Update – Ninth Circuit Holds That Bankruptcy Courts Lack Constitutional Authority To Finally Determine...

On December 4, 2012, the United States Court of Appeals for the Ninth Circuit added to the growing body of case law delineating the extent of bankruptcy courts’ jurisdiction in the wake the Supreme Court’s decision in Stern...more

Skadden's 2013 Insights: Corporate Restructuring

The global reach of capital markets, financial difficulties in the eurozone and the multinational nature of many businesses and financial institutions have increased the importance of understanding legal, business and other...more

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